The history of the fitness industry in the past century or so has changed rapidly due to different innovations in both fitness and more importantly business. Back in 1936 in Oakland, California, a 22-year old fitness enthusiast named Jack LaLanne opened up what is considered the first health and fitness club in the United States. At the time this little known fledgling fitness entrepreneur probably had no idea what this would mean to the culture of health and fitness in America and the wider world.
In his fitness club, a young Jack supervised weight training and offered nutrition advice to his members. However, at the time doctors warned the public against attending his gym as they believe his weight training would cause people to become too muscle-bound and develop serious medical conditions. Labeled a charlatan and a nut, his fitness club wasn’t welcomed with open arms in the beginning.
Fast forward to 2019 and Jack Lalanne is considered one of the founding fathers of modern fitness and the landscape of modern fitness has drastically changed. And while Mr. Lalanne was instrumental in the development of health and fitness of the populace, the ‘grunt and clank’ style of lighting weights in a mainstream fitness facility has waned in popularity in the last number of years.
In its place, a new fitness format has grabbed the imagination of the American public and the world at large. This is the boutique fitness studio.
Driven by a combination of economic, social and cultural factors, boutique fitness has become the fastest growing sector in the fitness industry. In this article, we are going to take a look at key stats behind its rise of boutique fitness, some of the reasons behind this and where the industry is going.
The Rise of Boutique Fitness
Over the last number of years, boutique fitness has been booming and this niche sector is now one of the fastest growing in the fitness industry. And it’s not just within this industry that the impact of the boutique movement is being felt.
On the 5th of March 2019, The Fast Company released its annual list of the World’s Most Innovative Companies and on this list in the wellness category is a company called Xponential Fitness. Little known outside the fitness industry, Xponential Fitness owns several different premium boutique brands such as Club Pilates Cyclebar, Stretchlab, Yoga Six and Purebarre. In 2017 Xponential generated $148 million across all its brands showing the enormous potential of this business model. Xponential, along with the likes of Equinox Holdings Inc., has become a force in the fitness industry.
But how did that happen?
Let’s first take a look at the last couple of years.
The rise of the boutique model has coincided with the decline of the big box gym. Between 2012 and 2015, memberships to boutique fitness studios grew by 70% in comparison to memberships at traditional gyms that grew by 5%. And it’s not just acquisition where these gyms are leading the charge. When it comes to retention, boutique fitness clubs are outpacing their mainstream rivals. According to the Association of Fitness Studios, the retention rate among fitness studios sits at 75.9% while the retention rate of the traditional gym has stayed at 71.4%
In general, there has been a rise in interest in health and fitness. Memberships for health clubs reached an all-time high in 2016, largely due to the rise in the boutique fitness phenomenon. However, it is clear to achieve the results that they want, people are turning away from the big box gyms and going towards boutique and class-based fitness studios because they get results. Just look at the numbers. High-end boutique gyms make up over 35% of a $26 billion dollar market.
What really solidifies the boutique models rise is one study that is released at the beginning of each year that is seen as an authoritative source by the fitness industry. The American College of Sports Medicines (ACSM) Health and Fitness Journal has released its Worldwide Survey of Fitness Trends every year for the past 13 years, and its 2019 edition goes over the top 20 trends for the upcoming year. The study surveys thousands of certified fitness professionals from around the world to determine what fitness trends will be important in 2019.
If you look down the list of trends for the year you will see Group Fitness at #2, High-Intensity Interval Training (HIIT) at #3, Functional Fitness Training at #9 and Yoga at #7. These trends can all be traced back to the rise in popularity of boutique fitness. Group Fitness was outside the top 20 only 2 years ago and now has shot to second in the list while another trend, HIIT, was number #1 in the 2014 and 2018 versions of the survey and has been consistently in the top five for the last number of years.
In the next part of this article, we will go into the reasons why boutique fitness has risen.
Why Is It Booming?
The rise of boutique fitness has been driven by a number of different economic, social and cultural factors.
The Change in the Industry
One factor is its rise is the changes in the economy in the last number of years. The middle class has been shrinking consistently since the end of the last century. A Stanford study in 2011 found that the percentage of American families in the middle class fell from 65% in 1970 to 44% in 2009. The recession of the late 2000s and early 2010s further accelerated this and caused a shift in how businesses operated across a range of different sectors in the world economy.
The result of this is what is called the “hourglass economy” where there is an increase in those at the higher and lower end of the income spectrum and a decrease of those who are in the middle. In response to this, a lot of industries opted to split into a higher and lower end business model to cater to this shift.
The fitness industry is no different with low-cost gyms emerging to service the lower half of the market while more premium boutique gyms service the higher end of the market. Some examples of the lower end of the scale include Anytime Fitness and Planet Fitness in the United States and Goodlife Fitness in Canada. The characteristics of these models include 24-hour access, low interaction with members and focus on individual and personal training over classes. On the higher end of the scale, examples include Club Pilates, Orangetheory, F45 and GymBox who focus on all-consuming class based member experience at a premium price.
The Importance of Tribe
As well as economic triggers, there are also social and cultural reasons. On the cultural front, the boutique fitness movement seems to be powered by a younger generation. This trend has been driven primarily by the Gen Z and Millennials, with a report by the IHRSA stating that the 18 to 25-year-old generation are more likely to attend fitness studios than other age groups. It also found that the higher age bracket of 35 to 54-year-olds was more likely to attend traditional fitness facilities.
As well as having a higher interest in fitness, this generation gravitates towards a more community-based experience when it comes to fitness. A 2014 Nielsen and Les Mils survey on global fitness trends identified that 63% of people attended boutique studios because of the community aspect formed by other people attending while 47% of people attended because of the atmosphere.
According to marketing guru Seth Godin, 21st-century living encourages people to move away from individualism and towards collectivism and community, primarily around consumption and brands. Consider the popularity of boutique fitness and its connection to social media. As we detailed in a previous blog on social media influencers, there are a lot of people who have found success online due to fitness and those who are serious about fitness aspire to be like them.
Where is it going?
As we stated earlier in this article, the current trends associated with boutique fitness are among the top twenty worldwide. And the enthusiasm of people to spend money on fitness does not seem to be slowing down. According to a new study from sports and nutrition company My Protein, 1,350 US adults aged 18 to 65 and found that the average American spends $155 per month on their health and fitness, that’s $112,000 in their entire lifetime, and $13,000 more than a public four-year college education which averages about $98,440.
The value of boutique brands is getting bigger and bigger. In a list of the 10 Fastest-Growing Franchises of Inc.’s 5000 in 2017, the top four spots were held by fitness or fitness-related franchises. And as revenue numbers for these brands become closer to the billions, the conversation turns towards IPOs and private equity.
Soulcycle filed for an IPO recently only to withdraw, but it may only be a matter of time before a fitness company does. The likes of Xponential Fitness, Roarke Capital and Equinox Holdings could make a bid with the revenue they are generating from their business model of having different brands under one umbrella.
Whatever way the chips fall, the future still seems to be bright for boutique fitness.